By Benjamin Ong
Picture: Danilo A. Fausto, GMA Kapuso Foundation
“The thing that a lot of people cannot comprehend is that Mother Nature doesn’t have a bullet with your name on it, she has millions of bullets inscribed with ‘to whom it may concern”. (unknown)
The 2004 Boxing Day tsunami that wrought deaths and disaster in 15 countries in Southeast Asia and Africa proved this. Hurricane Katrina that devastated southeastern America in August 2005 proved this. So did the earthquake in Christchurch, New Zealand on February 2011 and the earthquake and tsunami in Japan the month after. Jakarta, Indonesia was hit by severe floods just in January this year.
“To whom it may concern” indeed! Then again, I suspect Mother Nature has more than one bullet with the Philippines’ name on it. The latest typhoon – Super Typhoon Yolanda – takes the total number of tropical depressions that battered the country this year to 24…and another one – Zoraida – is, according to reports, due to hit this day.
…and it’ll hit the same region devastated by Yolanda three days before, the same region felled by a 7.2 magnitude earthquake less than a month before.
The global growth slowdown, the European sovereign debt crisis, funds outflow prompted by the speculation that the Fed would unwind its stimulus programme sooner-rather-than-later, the Philippines weathered them all better than most other countries.
The Philippine economy had been growing above 7% over the past four quarters and its government debt declining steadily from 71.4% of GDP back in 2004 to around 40.1% this year.
This justifies its credit ratings upgrade to investment grade earlier this year by Fitch Ratings (27 March), Standard & Poor’s (3 May) and Moody’s (3 October).
…Not the weather though. Like the devastation it wrought on Filipino lives, property and infrastructure, super Typhoon Haiyan (Yolanda’s international name) is predicted to slice around a half percentage point to this year’s 7.3%-7.5% GDP growth forecast. While this doesn’t sound much, it matters a lot for every Filipino man, woman and child who needs every point percentage of growth they could get to help alleviate them from poverty.
The good news is that, this time, the Philippines have stronger macro fundamentals that’ll support the Aquino government’s recent declaration of the release of some 18.7 billion pesos (US$429 million) to fund reconstruction, rebuilding and relief. And if this isn’t enough, the country’s investment grade credit rating would now allow it to borrow funds at lower interest rates from the international markets.
The Philippine economy will recover from this tragedy as it had many, many times in the past — more so now because of the forward momentum instilled by the government of President Benigno Aquino.
Our thoughts and prayers are with you Philippines.
(Editor’s note: This article was originally published by Financial Standard online)
